“I like machines more than numbers.”
“What else do you like?”
William hesitated. He wasn’t sure. Morgan was watching him, not unkindly.
“If you’ve something specific, you can come to see me again,” he said. And then he got up. The interview was over.
“Thank you, sir,” said William, as he left the room.
“How did it go?” his father asked eagerly, on his return.
“He said I could come to see him again.”
“He did? That’s splendid, William. Splendid.”
And in truth, William realized, the great man had been perfectly fair to him. It had taken Morgan rather less than half of one minute to see, with absolute clarity, that this young man had no idea what he wanted, no burning ambition, no particular talent, no achievement—in short, nothing whatsoever that could be useful to the Morgan bank. So he hadn’t wasted any time. Come back, he had said, when you’ve something to offer. And he was right.
But to his father’s chagrin, William had never gone back.
Several of his friends had been going into brokerage houses, others into trusts. “If Morgan takes you, he’ll work you to death,” they warned him. And in any case, he’d known in his heart that Morgan wouldn’t take him. There was no reason why he should.
Months had passed, and he’d quietly let the matter slide. His father had been disappointed, but had said nothing.
And in the years that followed, he hadn’t done so badly. He was a partner in a brokerage, nowadays. He speculated a little, but the biggest money he’d made came from his partnership in a trust.
Trusts were a way to make a lot of money. Originally, they were set up to take care of the funds for old-money families like the Masters. When grandfather made a will, with a nice big trust, the money would be managed for the family until it was all paid out. Depending on the terms of the trust, that could be many years. So trust companies were sound, conservative—trustworthy, in other words. At least, that was the idea.
But then some bright young fellows discovered that there was a legal loophole in these arrangements. The trust companies could also take in money, and invest it as they liked. Behaving like a bank, but without any of the rules that restrained a proper bank, they would pay high interest rates to attract the extra funds, and then undertake the wildest speculations. In short, despite their respectable-sounding names, most of them were pirates. Proper bankers, men like his father, were suspicious of the trusts.
“What sort of cash balances do you fellows keep?” Tom Master had once asked him.
“Oh, quite enough,” he’d said, which of course meant next to none.
“I met Pierpont Morgan at a reception the other day,” his father had continued. “I asked him what advice he’d give to a young man in a trust. You know what he said? ‘Get out.’”
Well, Pierpont Morgan was semiretired now. He spent a good deal of time supporting the Episcopal Church and its liturgy. He’d built a magnificent library next to his house to keep his fabulous collection of books and gems. Every year he went on his travels to Europe and returned with priceless treasures—old masters, Greek and Egyptian antiquities, medieval gold. Often as not, he just gave it straight to the Metropolitan Museum. His son Jack Morgan, a first-rate banker, but not so terrifying, was running the bank day to day.
The great man might despise him, but at least, William had been able to reflect, he had managed to prosper pretty well in recent years. The market had mostly been rising. The trust had made a fortune; the brokerage house, too. If you were making money, then you must be doing something right. They took in ever more money, pledged against the value of the stocks they held, and speculated some more with that. The higher you could build the house of cards, the better you did. Obviously.
He’d still been riding high when he read about the new Rolls-Royce. But even then, the cracks in the system had begun to appear. That spring, when the market had been shaken and credit had been tight, a number of the biggest men in American industry had come together to discuss the situation. Coal was represented by Frick, railroads by Harriman, oil by Rockefeller, banking by Schiff and the Morgans. They’d wanted to form a consortium to support the market. Jack Morgan had agreed, but old Pierpont had not, and the proposal had come to nothing.
All through the summer, William had watched as the market dithered, hoping it would strengthen, or at least send him a sign. Wasn’t the market supposed to be wise? So people said, but William wasn’t so sure. Sometimes, it seemed to him, the market was nothing more than an aggregate of individuals, like a great school of fish, feeding upon small hopes until some fright causes them all to swerve together. Amid all this doubt, the thought of the Rolls-Royce on its way to him had kept his spirits up. And when it was delivered, the solid magnificence of the thing seemed to say: No man who owns a Rolls-Royce can be in trouble.
How ironic then that the rotten timber that was about to bring the whole market crashing down should be the one with the most splendid name.
The Knickerbocker Trust. By the sound of its name, you’d have thought it was as solid as a rock. Knickerbocker meant tradition, his father’s club, old money, old values. Well, by noon today, the word on the street was that the Knickerbocker was in trouble.
At three o’clock, the partners of William’s trust had reached a terrible conclusion.
“If the Knickerbocker goes, it’ll start a panic. Everyone’ll want their money. The trusts will start going down like ninepins. Ours included.” And that would only be the start of things.
After the meeting, he’d gone into his office and closed the door. He’d taken a piece of paper and tried to figure things out. What did he owe? He really wasn’t sure, but more than he had. And what was he going to do about it? Nothing he could do.
Pray.
That weekend, on Saturday, William Master took his wife and children out in the Rolls. They drove up into Westchester County. It was quite warm, and with the fall leaves turning to red and gold, it was a beautiful drive. They went up to Bedford, and had a picnic there. A perfect day.
On Sunday, of course, they all went to church. The service was all right. A bit insipid. The vicar was away, down at a liturgical conference in Virginia with the great men of the Episcopal Church, including J. P. Morgan. The curate gave a sermon on Hope.
That evening, he read to his children. For no particular reason, he chose the tale of Rip Van Winkle. As they came to the place where the ghostly Dutchmen play ninepins in the mountains over the Hudson, he could not help thinking of the terrible crash of financial ninepins that was probably coming on Wall Street, but his face gave nothing away. Let his family remember one last, happy weekend.
And that night, when Rose remarked that two of the wives she’d met at church had whispered that there was likely to be big trouble ahead in the market that week, he smiled and said: “I dare say it’ll get sorted out.”
Not much point in saying anything else.
Sometimes William wondered if all things in the world were connected. But he hadn’t thought about Alaska. He was in the brokerage house the next morning when he saw the message on the wires. It looked innocent enough. The Guggenheims, the mighty German Jewish mining family, were going to develop huge copper reserves in Alaska. A good thing, one might think. But when William saw it, he cried out: “It’s all over.”
It was some time since a small group of speculators had decided to corner the copper market. He knew the men. The copper supply was limited, and the price was soaring. There hadn’t been a word about these damned Alaska mines. To buy the copper, they’d borrowed a fortune from the Knickerbocker Trust; but with huge new supplies from the Guggenheims in prospect, copper prices would fall through the floor. The corner, and the speculators, were surely bust.
It took just two hours for the price of copper to collapse. William went over to the trust offices. He’d no sooner walked through the door when one of the directors whispered to him, “Knickerbocker just asked for
a loan, and was refused.” This was it, then. Knickerbocker’s credit was gone.
The market groaned. The market swooned. All afternoon stocks fell. William felt sure that the Knickerbocker Trust must fail now. And after that …
It was mid-afternoon when one of his partners came in with unexpected news.
“Morgan’s going to try to save the trusts.”
“Jack Morgan’s away in London,” William pointed out. “Hard to see what he can do from there.”
“Not Jack. Old Pierpont. He took a private train up from Virginia. He’s been here since last night.”
“But he hates the trusts. Despises us all.”
“Yes, but there’s so much money tied up in them, he reckons there’s no choice. If they fail, everything goes.”
Was it a ray of hope? William doubted it. Even Jupiter with his thunderbolts could hardly remove this massive mountain of bad debt.
But it was the only hope on the horizon. That evening, when Rose asked him anxiously what was happening, he smiled bravely and told her: “Morgan’s going to sort it out.” No point in starting a panic in his own home. Anyway, he couldn’t face it.
On Tuesday morning, a crowd formed outside the offices of the Knickerbocker Trust. Soon they had to be formed into an orderly line by a policeman. They wanted news. They wanted reassurance. They wanted their money. Inside, Morgan’s men were going through the books.
At lunchtime, William went for a walk down Broadway. As he came to Bowling Green, he passed the offices of the two great shipping lines, Cunard and the White Star. Continuing down to the waterside he stared across the harbor at Ellis Island.
How long would it be before he was as penniless as the poor devils who came in there every day? he wondered.
As poor as an Italian peasant? Well, not in absolute terms. His wife and children would be looked after by his parents, no doubt. Perhaps his grandmother would do something for them, too. But it wouldn’t be easy. Most of her money was in a trust that went to Tom. Tom’s two sisters were expecting their share of any inheritance, too. The Rolls-Royce would be gone. His wife’s pearls. God knows what sort of address they’d be living at.
He wondered how Rose would take it. She loved him, in her way. But she’d married into a certain kind of life. That was the deal. Old money, with money. Take away the money and what sort of marriage would they have? He honestly didn’t know. At least the Jewish refugees and the Italian peasants arriving at Ellis Island had been poor when they married each other. They had nowhere to go but up. In a way, they were free.
It was almost funny really, when you thought about it. All his life, he’d been rich. But he’d been living in a prison cell—in the great jail, called Expectation. And he couldn’t get out of it.
Well, there was one way out. Maybe, when he’d tidied up his affairs as best he could, he’d go to the White Star Line and buy a passage to London. Say he was going on business. It needn’t even be a first-class ticket. No one would know. Then, somewhere out in the Atlantic, when it was dark, he’d quietly jump off the ship. Not such a bad way to go. Wouldn’t give anyone any trouble.
What sort of a life would he be leaving? Had he been happy? Not really. Did he like his house? Not so much. He loved his new Rolls-Royce—he was sure of that. But what did he love about it? The fact that it was expensive, the silver body, the red leather seats, the admiration and envy it evoked? No. It was the engine. That’s what excited him. The way it worked, the beauty of it. He’d have been just as happy if he was a poor mechanic.
The man who built that Rolls-Royce was the lucky fellow, William considered. A fellow doing something he loved, and doing it supremely well.
Do I love what I do? he asked himself. Not much. Do I do it well? He was mediocre, at best. And right now, he had failed, completely and utterly. How did he feel? Ashamed, humiliated, probably unloved. And very, very afraid.
By the time he got back to Wall Street, the news was out. Morgan’s men had concluded that the trust was past praying for. The Knickerbocker Trust had failed. Lines were already forming outside the other trusts, including his own. People were withdrawing their money.
The partners had already decided what to do if this happened. Pay out as slowly as possible. When he walked into his office, it was already under way. They would probably get through the afternoon, but after that? He had no idea. He watched the line. It was moving slowly but inexorably, like a river. Not even Pierpont Morgan could stop a river.
That evening at home, he smiled cheerfully through dinner with his family. Yes, there had been a little panic on Wall Street, he confessed to the children. They’d see it in the papers, and hear about it, but it would soon pass.
“The fundamentals of the market are good,” he assured them all. “Indeed, this is probably an excellent time to buy.”
The next day, people were camping outside the trust offices by dawn, hoping to get their money out before the rest. Meanwhile, the trust partners were looking for cash. The moment they opened for business, they went to the brokers, calling in all their loans. When he walked into his brokerage house, his partners there told him: “We’ll be lucky to get through the day. By tomorrow we’ll be gone.”
William went outside. There was nothing more to be done. He gazed sadly up at the sky. It was hard, and terrible. He turned, to walk to Bowling Green again, wanting to be alone.
But he had only gone a short way when one of the clerks from the trust caught up with him. The man was looking excited.
“Come quickly,” he cried. “Oh, sir, rescue is at hand.”
President Theodore Roosevelt had reason to be suspicious of New York City. A decade ago, he’d labored to reform its corrupt police. He’d also witnessed the mighty industrial combinations that J. P. Morgan was building up—and he didn’t like what he saw. Too much economic power was in too few hands, he believed. Elected governor of New York State, then chosen as vice president, the assassination of President McKinley had unexpectedly brought him, at the age of only forty-two, to the White House, where he had continued to speak against the might of Wall Street. For Pierpont Morgan himself, however, Roosevelt had a high regard.
In the early hours of that Wednesday, therefore, a remarkable thing had occurred. The government of the United States put the huge sum of twenty-five million dollars into the hands of Pierpont Morgan, with only one request:
“Do whatever you think best. But save us.”
And now Jupiter, greatest of all the gods, began to fling his thunderbolts.
When William Master looked back on those days, it was like remembering a great battle: periods of waiting; moments of sudden excitement and confusion; and a few haunting images that would never leave his mind again. Using the government money, and raising even greater private sums by the sheer force of his personality, old Pierpont Morgan went to work. On that Wednesday, he began saving trusts. The next day he saved the brokerage houses on the New York Stock Exchange. On Friday, when Europe started withdrawing funds, and credit became so tight that Wall Street came to a halt, Morgan strode in person up to the Clearing House and had it issue its own scrip currency, so that money could flow. Yet perhaps the truest measure of his authority was seen that evening, when he summoned the clergy of New York to his house and told them: “You’ll be preaching on Sunday. Here’s what you have to say.”
It took two weeks for Morgan to rescue the financial system. Along the way, when New York City declared it was also going broke, he rescued that too. In his final act, he called all the biggest bankers and trust men of Wall Street to meet him in his princely library, locked the doors, and refused to let them out until they did what was needed.
But the abiding image that remained in the mind of William Master came from Wall Street itself. It was on that first Friday. He was walking westward as he came to the street’s main intersection. On his left, on the corner, number 23, the House of Morgan. Across from it, the splendid facade of the New York Stock Exchange. On his right, Federal Hall and, a short
way up Nassau Street, the Clearing House. Ahead, only a hundred yards or so, was Broadway and Trinity Church. Here was the very center of American finance. This week, at least, it was the cockpit of the world.
And just at that moment the doors of number 23 opened, and out strode Morgan. The street was crowded. Millionaires and managers, clerks and messenger boys, they were all there milling about between the Stock Exchange and Federal Hall. There were brokers, whom Morgan considered too vulgar to mix with, but who had cheered his name to the roof of the Exchange when he saved them. There were trust men, whom he despised, but who camped outside his door to beg for favors. All manner of Wall Street fellows filled the narrow financial forum as the tall, burly banker in his high top hat strode out of his temple.
Jupiter looked neither right nor left. His eyes glowered as though lit by volcanic fires. His swollen, bulbous nose bulged from his face like a mountain from which his mustaches spread down like silver lava flows. Did Vulcan fashion his thunderbolts in there? Quite likely.
As he strode rapidly down the street, the crowds parted in front of him, as mortals before a deity. And so they should, thought William. Morgan might support his church, and like to sit with bishops, but when he descended into Wall Street from banking’s Mount Olympus, he was above mortal men. Then, truly, Morgan was Jupiter, king of all the gods.
But alas, he was still a man. In the months that followed, one question was often asked: “Morgan will not always be with us. What’ll we do then?”
Some argued that more regulation was needed, to stop the abuses that had led to the crisis. But William Master was sure this was a bad idea.
“Things got a little out of hand,” he agreed. “But we don’t need socialism. The banks can regulate themselves, as they do in London.”
It would take six years before a Federal Reserve system with limited powers was instituted.
For William, however, life soon returned to normal. When his wife asked him, “Did we nearly lose everything?” he reassured her.
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